Expanding Programmatic to TV Won’t Require a Seismic Industry Shift

While programmatic technologies have been transforming the face of digital advertising, for the most part TV continues to be traded manually. However, that situation is expected to rapidly change over the coming years. Here Nick Reid, Managing Director, UK at TubeMogul, discusses the effect the shift towards programmatic will have on TV agencies, programmatic progress in the UK and European, and the opportunities for smaller advertisers to have their ads viewed on the living room screen. Nick will be speaking on the panel on the role of the agency in a programmatic world at New TV Frontiers, London, June 10th.

What is TubeMogul currently doing in connected TV?

We work with premium suppliers such as Flingo and adRise as well as with publishers directly to provide millions of these impressions daily on videos from broadcasters, music labels and others. Connected TV is a great medium for brand marketers due to the enhanced viewing environment created by the larger screen and non-skippable inventory. We see the inventory scaling across a number of European markets, providing another opportunity for us to really unify the buying process for TV and online video.

Programmatic buying has had a profound effect on media agencies. Is it likely the same impact on TV agencies and how will they need to adapt?

There is a growing chorus of advertisers that want to buy TV through software because it gives them accountability and control. Some agency groups – like IPG Mediabrands – are even setting specific deadlines to automate their ad buying, including on TV.

Even though the stakes are high – advertisers spend $197 billion on TV annually, according to Zenith Optimedia, so expanding programmatic to TV does not require a seismic shift in the industry. Marketers can continue to make direct deals to buy TV, with similar economics. The difference is that software determines who sees which ad, when – adding value to the publisher’s inventory by increasing relevancy to viewers.

On a scale of 1 to 10, where 1 is ‘no interest’ and 10 is ‘we’re already doing it’, where do you think the UK TV industry is at in terms of opening up their inventory for programmatic buying? What kind of progress are you seeing in other European markets?

4/10. It’s early days. Programmatic TV buying has already been introduced in the UK via Sky’s AdSmart platform. The main obstacles to widespread adoption are a). necessary structural changes within large organisations and b). the establishment of a standardised technology to regulate pricing. The UK is at the forefront of this movement in Europe, though there is clearly a traditional trading legacy, which does maintain the status quo. The world of the consumer is changing and converging when it comes to how they are engaging and interacting with video and TV. The digital market has welcomed programmatic and the idea of using software to buy ads in a more efficient and accountable way. Many advertisers are reaching their target audiences, through online video, however the spend that is still invested in those legacy business doesn’t necessarily reflect where the audience actually is anymore.

We’re seeing companies like BSkyB start to build out a local TV advertising business in the UK. Is TubeMogul seeing any rise in interest from smaller advertisers who might have previously not been interested in video and TV?

Yes. Smaller advertisers are beginning to see that they can get the similar reach and performance with online video, often with less cost than they would with TV buys. They can also make direct comparisons to TV using Nielsen Online Campaign Ratings and planning tools like our own BrandPoint. Branding is predicted to significantly outpace display and direct-response growth over the next five years, and automation has levelled the playing field for smaller, independent agencies. Advertisers recognise that their audiences have shifted online as illustrated by the continued increase in programmatic video inventory available. Software platforms like ours help these advertisers achieve the scale, efficiency and control they expect. This, in addition to targeting and audience verification provided by Nielsen OCR, makes programmatic video much more appealing.